Home Owners Association

Weatherstone Community

Neighbors,

This letter serves as notice of the upcoming quarterly HOA meeting to be held at 7 pm, December 1, 2003. This meeting is important as the 2004 budget will be presented by the Board of Directors and voted on by the attending membership. The proposed budget is attached for your review. In addition, we will be filling a vacancy on the board due to Rex Geissler’s resignation. We encourage you to participate by attending the meeting so that you may vote on these important items.

With the opening of the community pool and the nearly complete build-out of the remaining homes, this and the coming year represent a transition period in our community. With this transition come significant changes in focus for the Board and residents. The focus now shifts from a developmental phase to an operational phase, which mandates changes to the budget. The cost overrun associated with completing the pool, the clarification of pool operating expenses, and the increase in common area landscaping have all negatively impacted the financial condition of our HOA.

The attached financial statements show that the completion of the pool project has left us with roughly $30,000 remaining in our reserves. This account contains the funds that are used for future capital improvements (additional landscaping, etc.) as well as for the replacement of existing assets (pool components, fencing, dead trees and plants) as they deteriorate. Our management company recommends we maintain a reserve balance of at least $100,000 for an asset base of our size. For this reason, the Board intends to implement a plan that will return our reserves to this target by the end of 2005, and allow us to address the continuing landscaping issues at the pool and surrounding areas. To accomplish this the Board plans:

1. To reduce expenses by aggressively negotiating the 2004 landscape maintenance contract and cutting the HOA funding of social events,

2. To negotiate with HRMD to allow them to annex the parking area at the pool,

3. To raise the dues by $12.50 per household per month. The new amount includes community-wide trash service (see below)

Combining these measures will provide an additional $27,000 dollars that can be added to reserves annually. The Board views the implementation of community-wide trash as a win-win situation for the residents and the Association. The economies of scale associated with this service will allow us to provide consistent service at a reduced cost. The Board believes that the HOA rate increase of $12.50 per month and adding the community-wide trash removal program will save most homeowners money (compared to the typical $13-17 per month most residents currently pay for trash service).

We look forward to seeing you at the meeting.

Sincerely,

The Weatherstone Board